Leeds Office transactions fell by one third in 2008, but demand for office space is due to be sustained in 2009. Last year commercial property agents estimate that the total transactional values hit Â£110m, but this was 32% less than in 2007 and 72% lower than 2006. There was around 275,000 sq ft of new space finished in Leeds last year with a further 290,000 sq ft due to be completed this year. Total take up was 428,000 sq ft last year, 22% below the 10 year average of 551,000 sq ft. This was over 160,000 ft less than was the case in 2007. But with a biting recession should anyone be even remotely surprised?
Experts believe that there is nearly half a million square feet of premium grade A office space available in Leeds at the moment. The headline rental rate is around Â£27 per sq ft and this in not expected to fall into 2009. It is thought that the main stream of inward investment into the UK office market is coming from Germans Funds. With prices historically low, foreign companies are eying the UK commercial property market, in anticipation of price increasing when the economy picks up.
With banks having no desire to lend for new schemes, speculative developments have almost dried up completely. However, with so much office space un let, it will aid prices and stop the danger of over supply.